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Monday, January 02, 2006

CINEXCHANGE : AN ALTERNATIVE TO PEERFLIX







Hi everyone !

Our group has been working for almost 2 years on this project (even before peerflix). We're a bit late, but hey, we're not financed by business angels like peerflix ...!

We'll launch it hopefully by early March'06 : you can already check it out www.cinexchange.com ... and tell us what you think (please don't register yet, it's only 90% functional). For testing purposes, use the following :

User name : Brad
Password : Brad

Any feedback is welcome.

Our site will be different and better (IMHO) than peerflix for 3 MAJOR REASONS :

1) Cinexchange is really 100% FREE and legal.

There's no membership and, most important, WE DON'T CHARGE ANYTHING FOR TRADES (in or out). Nothing, zip, nada, niet, zero, rien du tout !
Our target is indeed to become in the next 2 years as big as a legal form of kaZaa could be, not just another money-making business that could disappear in 6 months. Peerflix must content stock holders, not us. We do that for fun !
But to achieve that, and convince millions of users, we'll simply be 100% free and rely on advertisers to cover our costs.
And guess what ? : check what Napster became in a few years... The new legal (and commercial) Napster is ranked now even better than kaZaa by Alexa.com (3,386 vs 4,257 respectively ...). That means a legitimate business can succeed over an underground/illegal p2p.

2) Our trading model is quite different than peerflix'.

We decided to copy the stock exchange principles and adapt the NYSE functionalities to our system. With cinexchange, DVDs (or UMDs or Games) have no set values such as the peerflix peerbux. We rely on live quotation of each item. BTW you can find in our homepage a scrolling-infobar showing live quotes of the most popular movies/games (most traded), a kind of NASDAQ/DOWJONES index for the top 40 items. We consider each new item is worth 10 points at the beginning. It's not important if it's a new release or not, because this value will rapidly fluctuate, according to the demand/offer principles of any such stock-like market. Some movies actually build value with time and become classics, or the opposite when critics/reviews are terrible : don't you think 'The Godfather' or 'Titanic' should be more valued than the last 'Vandamne movie', even though the latest has been released 2 weeks ago ?
We just think IT'S NOT UP TO US TO DECIDE WHAT A MOVIE IS WORTH, and that's peerflix mistake. Who are we to decide so anyway ? Movies, and art in general, is a matter of taste. So the market only (members) can and will decide, not us. And that's a major difference with peerlix and their 3-peerbux value system. With peerflix, any new release is valued 3 peerbux, even B movies. And then they decide that, suddenly 6 months later it's worth 2 peerbux and so on ...
Our system is way more flexible and fair, because it works exactly like the stock market : it fluctuates ! In real life, stock values are never set by the traders, but by the market and shareholder transactions. To follow this analogy, peerflix acts exactly as a trader, a middle-man that would decide of the purchase price !!!Thus in our model, movie value is rather defined by the last occured transaction (works just like NYSE).
Now imagine : "User1" wants to trade out "Star Wars - Episode 2". The last transaction set the value at 4 points (scale of 10). But user1 knows the yesterday's release of Episode 3 is "helping" the market of Star Wars movies, so he's asking 6 points for it.Now, User2, a Star Wars fan, is deperately looking for the Episode2 to complete his trilogy, and declared being ready to spend as much as 8 points for this movie.Cinexchange match-engine asks user1 to mail out his movie to user2 (the same way peerflix does), but user2 will spend only 6 points for it, not 8 (he's actually saved 2 points in this transaction). Now, Star Wars Episode 2 value climbs up to a 6-points, while it's impossible with peerflix system to go backwards.
With cinexchange, movies will continue to have a "life" and their value will for sure vary up and down, following professional critics reviews, words-of-mouth, possible sequels, collectibles, rumors and many more 'outside' non-economic factors...Moreover, this will draw frequent visits by members to our website, because it will be very fun to check what their movie-portfolio is worth ! Savvy users can actually play with our system to save many points on transactions and watch more movies for the same points-spendings.
When a member needs a few extra points to complete a transaction (imagine user2 had only 4 points to trade-in star wars 2, while user1 wanted 6 points) and has no more movies to trade-out, we'll offer (a bit like peerflix), the option of purchasing them at a rate of 2$/point (FYI, a new release, at first valued 10 points, has an average market price of $20, check Walmart, hence 2$/point). User2 needs only to add-up $4 (2 points) to access this higher-value movie.
But that's not our strategy at all to push members to do so. We prefer the cinexchange market to feed itself. And we won't make any profit from these purchases, we'll use these funds to 'feed' the market with new movies releases, just the way Banks feed the stock market buying stocks and reselling them. At least, even though cinexchange is not a profit-oriented website, we'll be able to finance and provide constantly attractive new releases to our members.

3) Our logistic model is different too.

In fact, we're still working on it and would really appreciate your feedback on that, because it's crucial. At first, we wanted to follow the same true-peer-to-peer logistic model used by Peerflix where : user1 sends his movie directly to user2. But reading forums on that, it seems like there's a lot of complaints about frauds (fakes, illegal asian imports, burnt copies etc ...). And that's Peerflix' weakness, despite their so-called PeerSafe protection. They evaluated such complaints to 2% but it might be much more and rising significantly. Of course users are banned by peerflix (really?) if they file too many complaints, but there will be for sure many errors of judgment on peerflix end on who's really responsible for the fraud.

So our idea is as follows (tell us what you think) :

A - user1 send his movie to cinexchange (our office is in Miami) along with a 37cents extra stamp INSIDE the enveloppe - Total cost = 74 cents.

B - we open the enveloppe, verify the movie accuracy, playability etc...

C - we repack it and send it to user2 on user1's cost (remember ? the included extra stamp ?)

Total cost of transaction is 74 cents for users. It's still around 50% less than the peerflix $1.36 but there's now a 100% SECURITY GUARANTY, because Cinexchange acts as an independant third-party verifier and guarantor.

I got this idea when, 3 months ago, I've been victim of an e-bay scam (i actually lost 450$ trying to buy a laptop!). The seller, supposedly based in UK (in fact russian mafia / dixit FBI), pretended there's a new service offered by DHL acting as an independant third-party guarantor, verifying sold products before they're shipped, and confirming to buyers their compliance with the advertized products. Then buyers send to DHL the Western Union payment receipt # and only then DHL ship the products. A great scenario, hu ? Well ... if only DHL offered such a service !!!The bottomline is that such a service would be great if it existed. Maybe UPS, Fedex or DHL should think about it seriously, because as the shipper, they're in the best position to check products compliance ... So we would be in such position if cinexchange verified each products before shipping'em out to destination member.
The only downside of this logistic is that it might take an extra 2-3 days to receive your movies. But at least, there should'nt be any possible complaint and fraud issue would be solved.With peerflix, in any case of complaint, it will ALWAYS be the user1's word against user2's. Hard to judge. If user2 sends out to peerflix the supposedly 'suspiscious' movie for verification, nothing proves that he's actually sending the very-true movie he received from user1 !... user2 could burn-copy it himself and send it to peerflix saying that's what he received from user1, or send one of the junk movies he wants to get rid of and pretend user1 sent the wrong movie... Believe me, frauders are smart, they always find a way.

I really would like to get your opinion on this, because we're still undecided in our team on what's the best logistic model to adopt. We opted for the self-printed mailer by users (just like peerflix) and this is already implemented, but we're still left with how to deal with complaints in a way that would maximize users' trust and minimize our expenditures/responsability when they happen.
Would you prefer to wait a little longer (2-3 more days) but benefit from such a guaranty ?

Many thanks again for your feedback and happy new year 2006 to all of you !

I can be contacted at :
webmaster@cinexchange.com


14 Comments:

Anonymous Brad Thomson said...

Hi, I'm a very deceived user of peerflix, waiting 3 weeks to get a single movie !
Hoping your website will be better. Keep us posted, i'll give it a try !

8:21 PM

 
Anonymous Anonymous said...

if your site is free...why in the account area is there both "trade points" and "available trades" and the ability to buy both?

3:38 PM

 
Anonymous Anonymous said...

looks like you have to buy trade credits just like peerflix...i dont get it???

i understand the points are what you get for trading your dvds but how do you get trade credits??? looks like you can only buy them.

4:03 PM

 
Blogger CINEXCHANGE said...

Well, we wanted at first to operate like peerflix and sell trades to cover our costs, but we decided not to and rather rely on advertising (very soft / only adsense text-links).
In account section, the "trades available" section has not been removed yet, but believe me, trades will be really unlimited and completely free.
Extra-needed points might be purchased though, in order to complete a transaction if you don't have enough points, but we'd rather encourage you to trade-out another of your movies, we're not profit oriented. Any income will be automatically invested towards members, we'll buy new releases with these funds to make sure there's always attractive titles, unlike some other websites relying only on members' inventory. In other words, we'll "feed" the market, just like banks do on the stock market ...

6:06 PM

 
Anonymous Anonymous said...

putting all your cards on the table before your site is up and running probably isn't the smartest thing to do...JMHO

12:59 PM

 
Blogger CINEXCHANGE said...

We're working in an open-source kind of state of mind. Any advice to improve cinexchange is welcome, and even highly recommanded !
That's why we consult potential users before launching, particularly on the logistic options...
we're not really affraid of being copied, this project took almost 2 years to developp and we're really close to launch it (early march i'd say). It would be hard to build such a website in 45 days ...

2:54 PM

 
Anonymous Anonymous said...

I'm not quite sure about your logistical model. I have never had any problems with the quality of dvds I've received using Peerflix. I would rather receive the movies sooner than the added protection of a verified dvd. Also, paying only 39c instead of 78c per movie would make a big difference to me.

1:28 PM

 
Blogger Johnathan said...

How will you have the man-hours (or woman -hours ;D ) to check all these members DVDs passing through your hands? Won't this be costly? Or will you only check a random percentage?

I guess I'm not seeing how ad income could pay enough to support all the staff it would take to process DVDs.

Also, if the disc is received broken by CineXchange, what happens?
A. Deal called off, person who sent DVD TO CineXchange must accept a loss.
B. Deal continues, person who wants DVD FROM CineXchange gets someone else's copy.
C. ?
And what if the person getting the DVD FROM CineXchange finds the DVD is broken or somehow unplayable due to USPS damage after CineXchange mails the DVD out?

8:07 PM

 
Blogger CINEXCHANGE said...

Hi Johnathan,

First, many thanks for your feedback on cinexchange concept. We got an idea : building trusted relationship with users who can become 'senior traders', and could help making our project better and much more efficient than Peerflix.
We could even push this idea a step further, in order to alleviate the verification burden from our shoulders...
How about the idea of using the 'senior traders' (ST) as ultimate third-party verifiers ? In other words, after some time of operation, we'll offer the most active and reliable traders the chance to become a 'senior trader'. Then, we could name one ST in each state to begin with, and eventually narrow that by each county and ultimately each large city (let's dream).
Each Senior Trader would have now the burden to verify a movie sent by user A to user B (with the appropriate additional stamp provided by user A). We'll select the ST living the closest to User-B's address, in order to shorten delivery time between ST and user B.
On the other hand, the ST will benefit from being able to retain each received movie (and watch it if he wants to) for 24h (for example) before shipping it forward to user B. The ST will act as a guarantor, checking that the movie sent by user A is OK, otherwise he would resend it instead back to user-A with a pre-printed note saying something like "Sorry, but this is not the movie requested by user-B" or "it's a fake, you'll be banned from cinexchange" etc ...
In this scenario, we're still facing the downside you mentioned about risking some USPS delivery issue (twice the risk of lost mail in fact), but as long as there's a sender address, i think this is really the least of the potential risks, especially compared to the fraud issue Peerflix is already facing, or somehow encouraging by not actively fighting it.
Beleive me, we've tested Peerflix and actually sent voluntarily 5 'made-in china' illegal copies through Peerflix, just to seee what would be their reaction... : so far, nothing ! Not even a warning ! Worse : we actually could trade-in legal DVDs instead ! If we could do it, that means anyone could ! That means they're either not taking care of users complaints or closing their eyes as long as they make profit selling $0.99 trades. But i can't believe the peerflix users who received our illegal copies could all 5 not complain at all. At least one user has surely complained. And it was obvious they were illegal copies, the DVD were even with chinese titles on covers and very poor quality screeners. It's by the way very easy to purchase these copies on the net, and i wonder why google or yahoo accepts these companies to advertize through Overture !!! Just enter the keywords 'buy DVD' and you'll find at least one company offering movies with release dates due in 2 months !!!
By the way, that's also a weakness of Peerflix, or a proof of their fraud encouragment : they accept to reference movies in 'DVD i have' section, even though the release date is later than today! How can that be, hu ?!!! How can a user legally own a DVD that's not even out on the stores shelves yet ?!!! Just try to enter any coming-soon-movie in your have-list and you won't face any problem with Peerflix!!!
With Cinexchange, we don't even show up any coming soon movie in our browse list, exactly to prevent such a fraud ...
Let us know what you think about the above idea and check also updates on our cinexchange blog.
And if you're still undecided between Movie Rental and Trade DVD or Game Swap, make sure to visit www.cinexchange.com first (as early as march 2006), before signing-up with Peerflix or Netflix.

11:39 AM

 
Anonymous Anonymous said...

Dude you might want to check out SwitchDiscs.com

They offer DVD, CD and video game trading for free.

11:53 AM

 
Blogger CINEXCHANGE said...

well, thanks for the info about switchdiscs. Competition is good ! But wait to see what we've done, i think we're way ahead this simple copy of Peerflix (including amazon partnership btw). What we've done is improve Peerflix for good. Wait a few more weeks and you'll understand why cinexchange will become the legal Kazaa.

3:26 PM

 
Anonymous Anonymous said...

you're not the "first" free trading platform. these guys beat you to it...

http://www.switchdiscs.com

not to mention peerflix.

10:54 PM

 
Blogger CINEXCHANGE said...

hello anonymous,

i agree for switchdiscs but not for peerflix which is not free at all !
Now for Switchdiscs, it all depends on what you call "free trading". If for you free trading means waiting 6 months to get the movie you want, well yeah, right. I hope you have a lot of "free time". If free trading means buying the movie on amazon because switchdiscs doesn't have it available (they're affiliated), well yeah, right, switchdiscs offers "free trading".
No offense there, but we just strongly believe we'll offer the strongest business model so far because we'll FEED our market, unlike competitors.

1:47 PM

 
Anonymous Anonymous said...

not another one of these...there's already peerflix, switchdiscs, titletrade and now lala.

6:52 PM

 

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